Key Issues Impacting Specialty Run Retail
The run business is strong. Retailers tell us how they are working hard to keep it that way.
For the most part, independent running specialty retailers are content and satisfied with the state of their businesses today. Monthly sales have largely been stronger than in 2020 and newcomers to the activity appear to be sticking around in year two of the pandemic, forcing retailers to strategize the best ways to keep them engaged with the activity and purchasing new products seasonally rather than yearly.
But, there is more than a whiff of concern in the air from coast-to-coast. It’s not being prompted by rising cases of the COVID-19 variant across the U.S. or higher product prices but rather persistent global supply chain and logistics issues. Without proper planning and coordination with key vendors, these retailers admittedly could find themselves caught with their running shorts down in the months ahead into Spring/Summer 2022.
The four ‘S’ words found regularly in the vocabularies of retail run specialists today are:
Supply Chain: Global issues ranging from factory shutdowns in the key athletic footwear-making market of Vietnam to container shortages and clogged U.S. ports are likely to slow deliveries of key products for Q4 into Spring/Summer 2022 for at least some vendors.
Substitution: It’s likely going to be a key buzzword for the remainder of the year and into 2022. Convincing customers to have a second-choice in mind or in-hand in their closet will be crucial if stockouts and delivery delays become the norm.
Staffing: During the first 18 months of the pandemic, retail run specialists were able to retain key personnel for the transitionary time marked by increased curbside pick-ups, online ordering and appointment shopping. But as the pandemic has eased in parts of the U.S., key store staffers are moving onto other jobs, grad school and the like. The situation is forcing run specialty retailers to re-evaluate their compensation packages and redeploy remaining staff to do more with less.
Stockpiling: Aware of the ongoing logistic/supply chain crisis, which has been a factor for at least 16 months, there is a movement underfoot to stretch inventory-on-hand with key models without busting the budget or igniting a potential “fire sale” down the road.
Here, we check in with specialty running retailers on the state of the market — and how they are strategizing.
Naperville Running Company.
Kris Hartner, owner of Naperville Running Company, a three-door run specialty chain in Illinois, was encouraged recently by what he saw a key branded vendor do—pull a key style from its own ecommerce site and move the inventory into the specialty running channel.
“Customers value having the products where they want to buy them,” he says.
Naperville Running is addressing potential disruptions to the product pipeline over the coming months in several ways. It has worked to increase inventory on hand of key styles for up to three months from a normal two; it has diligently kept its staff of 30-plus informed about supply chain issues; it has encouraged core customers to purchase a replacement pair earlier than they would or at least try on other models to have an alternate style in mind in case of out-of-stocks; and it has tried to always remember that it has to ‘Live Life with the Unknown’ and eventually answer the question—Did we not buy enough or buy too much?
Customers value having the products where they want to buy them. – Kris Hartner, Naperville Running Company
Hartner feels that his customers understand the actions his business is taking related to possible delayed deliveries and style outages in the coming months caused by global supply chain issues. And most key vendors have contacted Naperville Running by phone or mail regarding the current situation.
“Customers have seen it with autos and restaurants. They understand. We’re trying to get ahead of [potential supply chain problems] without trying to seem like we’re pushing products on customers,” remarks Hartner.
While there remain many unknowns about what could happen in late 2021 into the H1 of 2022, the owner says Naperville, which has all its S/S 22 orders on the books, is witnessing reactions by vendors and possible new trends due to market conditions. One involves not dropping MAP pricing on previous models given the updated model might not hit retail until a month or later than initially planned. That action should help maintain margins.
Coming out of an August where monthly sales hit an all-time high, Hartner say the topline has been helped by the return of the cross-country running segment but has not seen a lot of movement in the top styles his customers regularly seek out. New styles from On that are plusher and more cushioned have received a positive reaction, he says.
“Nobody [on the vendor side] is really dropping the ball in a big way right now,” says Hartner. “But if a big style doesn’t drop, then there might be a big swing.”
An Eye on Inventory.
Manhattan Running Company.
Trey Vernon, co-owner of the 5,500-sq.-ft. Manhattan Running Company shop in Manhattan, KS, says the store “is stockpiling as much inventory we can afford to carry” out of concern about possible shortages and out-of-stocks in the months ahead. He and co-owner Ben Sigle are concerned about how any lack of inventory will affect their ability to keep customers happy in the months ahead.
We are letting everything come in and we’ll then deal with any overages later. Hopefully, we will have enough inventory to make it through.” – Trey Vernon, Manhattan Running Company
“We also aren’t adjusting any futures down,” he stresses, adding, “We are letting everything come in and we’ll then deal with any overages later. Hopefully, we will have enough to make it through.”
Current top selling brands at the shop, two miles from the Kansas State University campus, include Hoka One One and Altra, says Vernon. Getting “fresh stock” from Hoka is currently a challenge. Altra “is gaining steam” as its employees have fallen in love with the brand’s new Torin model. While the buying habits of core customers haven’t changed much during the pandemic, the banner’s new consumers are driving sales of more shoes only for walking use.
The availability of more footwear in varying widths is one trend the store owner has his eye on. “We have always sold a lot of widths but have heard from others that this is picking up,” comments Vernon. “I am hopeful that some of the smaller brands will do more widths.”
New Customers, New Ideas.
Ridgefield Running Co. • Darien Running Co.
More consumers in the Nutmeg State, like many locales, are moving around outside since the start of the pandemic, sparking greater interest in a wider range of footwear styles for running and walking. This trend includes greater interest in trail shoes for customers who have discovered the region’s local trails, says Megan Searfoss, owner of Ridgefield Running Co. and Darien Running Co. in Connecticut.
And customers at the CT-based run specialty shops are asking for specific shoes in-store after spending time researching them online, including on the run shops’ online store that opened in 2020.
“People want to move outside, many for the first time, or some who are returning to outdoor fitness. They appreciate the community we provide through events and clinics,” says Searfoss, adding that the stores have invested in a mobile fit station for use at events or pop-ups for business fittings.
Meanwhile, the two shops recently invested in a new storage unit to stock up on key products in the wake of potential availability issues in the months ahead.
Like other retailers across the U.S., Searfoss remains concerned about supply chain woes creating a loss of sales and the possibility of some brands keeping shoes for their own Direct-To-Consumer businesses and not supplying small independents.
A Positive Outlook.
Jeff Anderson, owner of Kelley’s Pace run shop in Mystic, CT, has learned a great deal about this Northeast Connecticut seaside and tourist community and its legion of runners since acquiring the shop in Olde Mistick Village. He bought the shop from Mary Camire, who operated the store for years with the late Boston Marathon champion and Olympian John Kelley before deciding to sell it in October 2014.
And this past year-and-a-half has taught unique lessons of its own. Despite is challenges, Anderson admits, “COVID has been good to us. More people are outside and still want to stay outside,” says Anderson, who oft has his dog in store to greet customers, much like Kelley did. “Running, walking and fitness are in a boom phase. I see it continuing for a while.”
My biggest concern is keeping customers returning. The less product we have, the harder it is to give them choices. We have resorted to buying a shoe at full price on a brand’s website, just to keep a customer happy.” – Jeff Anderson, Kelley’s Pace
But that doesn’t mean the shop owner doesn’t have worries. Namely, having enough inventory on hand for his customers amidst supply chain challenges. “My biggest concern is keeping customers returning,” Anderson says. “The less product we have, the harder it is to give them choices. We have resorted to buying a shoe at full price on a brand’s website, just to keep a customer happy and make sure they come to us, and not go directly to the brand. We can’t do that often, but occasionally we think it is worth it.”
Anderson says he has had several instances where a customer comes in, gets fitted, and then perhaps asks for another color of a shoe. “Then when we say it’s not available, [we can all see] it’s available on the manufacturer’s site,” he says. “Not long ago, the inventory on the manufacturer’s ecommerce site was the same inventory we could see on the B-2-B site. Now there seem to be many more shoe available to the consumer online that are not available to us in the store. We can explain supply chain issues to customers, and they are understanding for the most part. It’s just very hard when they have access to shoes that we do not.”
Still, Anderson is thankful for appreciative customers and their respective words of support about Kelley’s Pace being able to survive the pandemic.
On the product front, he points to the strong sales of Hoka One One and the rising popularity of products like Theragun over the last year.
“We have more people specifically asking for Hoka than any other brand,” he says. “And just a few years ago, no one even knew what the brand was, let alone ask for it.”
Strategizing & Staying Active.
Amarillo, TX-based run shop Get Fit, led by owner Karen Roberts, reports that since the onset of COVID-19, one thing that has not been an issue is pricing. The store owner says that customers have been willing to spend more on footwear and apparel that will meet their fitness needs.
“I think folks want to continue maintaining an active lifestyle and set fitness goals that can be achieved through dedication to their chosen activity,” says Roberts.
“Price seems to be less of an issue than being fitted in gear that will meet their standards,” Roberts offers, adding that Brooks, On and Lululemon are the shop’s best-selling brands of late.
“Customers are wanting tried and true with Brooks,” she says. “On gives them something fairly new to our market that is fashionable and functional while with Lululemon they get the workout gear that looks and feels great.”
At Get Fit, work has begun on a strategy to increase purchases so that there will be enough inventory in place to serve customers through Q2/22. Roberts is encouraged by the transparency of many of the store’s vendor partners who have already cautioned her about possible supply issues due to workforce and shipping issues.
Still, she remains concerned about the status of the global supply chain and what it might mean for Get Fit’s ability “to continually give our customers the best quality products in a timely manner.”
Learning Along the Way.
Big Peach Running Company.
Mike Cosentino, founder of Big Peach Running Company, the seven-shop specialty run operation in Georgia, says his business, too, is wrestling with ongoing supply chain issues.
“It has impacted habitual behaviors by our team in the models they bring from our stockrooms to the way our buyers spend their time, with the necessity of securing and sharing updates accordingly,” he opines.
With an eye on the future, and what can be learned from the current state of affairs, he notes, “If we are going to have any favorable legacy from these challenges now and in the months ahead, we need to scrutinize where improvements should have been made long ago.”
Adds Cosentino, “For us, it is time to break the figurative box on how we move product among our various stores and business units, how we receive shipments and perceive and consider payment terms with our suppliers and how we become even less dependent upon the at-once and special orders. It is just true that our planning exercises for 2022 may not be able to delve quite deeply into the sexier growth initiatives until we first fully immerse ourselves in the critical details associated with procurement.”